GDPE0791ICR- Switzerland Power Market Outlook …Switzerland Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 11 SWITZERLAND POWER

REFERENCE CODE GDPE0791ICR | PUBLICATION DATE JUNE 2015

SWITZERLAND POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS,

AND COMPETITIVE LANDSCAPE

Switzerland Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

SWITZERLAND POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

Executive Summary

Switzerland’s Power Sector Outlook

Switzerland’s Gross Domestic Product (GDP)

increased at a Compound Annual Growth Rate

(CAGR) of XX% between 2000 and 2014, the

historical period considered in this report.

Population growth occurred at a CAGR of XX%

over the same period. The industrial and

residential sectors are the largest contributors to

power consumption growth in the country, and this

meant that power consumption increased at a

CAGR of XX% during the historical period, as

shown in the following figure.

Power Market, Switzerland, Gross Domestic Product ($bn) and Annual Power Consumption (TWh), 2000–2014

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Ann

ual p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

bn)

GDP (constant prices) Annual power consumption Source: GlobalData; IMF, 2015

Annual power consumption increased from XX

Terawatt hours (TWh) in 2000 to XX TWh in 2014,

and was mirrored by growth in annual power

generation, which grew from XX TWh in 2000 to

XX TWh in 2014 at a CAGR of XX%. Although the

largest contribution to this growth came from

renewables, it is hydropower and nuclear power

that contribute the largest share of installed

capacity in the country.

Power Market, Switzerland, Annual Power Consumption and Generation (TWh), 2000–2014

2000 2007 2014

Ann

ual p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on May 29, 2015]

Hydropower was the single largest source of

electricity in Switzerland in 2014, accounting for

XX% of total installed capacity. Switzerland also

uses nuclear power and renewable sources such

as wind, solar and bioenergy, as well as thermal

power sources in the form of gas and oil. Nuclear

power accounted for XX% of the total installed

capacity, followed by solar power with a share of

XX%, and other renewables with XX%. Gas- and

oil-based thermal capacity cumulatively contributed

the remaining XX% in 2014.


Table of Contents

SWITZERLAND POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE

LANDSCAPE

1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 7

1.2 List of Figures ..................................................................................................................... 9

2 Introduction ............................................................................................................................... 10

2.1 GlobalData Report Guidance ............................................................................................ 11

3 Switzerland, Power Market, Snapshot ...................................................................................... 12

3.1 Switzerland, Power Market, Macroeconomic Factors ........................................................ 12

3.2 Switzerland, Power Market, Supply Security ..................................................................... 14

3.3 Switzerland, Power Market, Opportunities ......................................................................... 15

3.4 Switzerland, Power Market, Challenges ............................................................................ 15

4 Switzerland, Power Market, Market Analysis ............................................................................ 16

4.1 Switzerland, Power Market, Supply Structure.................................................................... 16

4.2 Switzerland, Power Market, Key Market Players ............................................................... 16

4.3 Switzerland, Power Market, Financial Deals ..................................................................... 17

4.3.1 Deal Volume and Value Analysis, 2004–May 2015 ....................................................... 17

4.3.2 Deals by Type, 2014 ..................................................................................................... 19

4.4 Switzerland, Power Market, Demand Structure ................................................................. 20

4.4.1 Consumption by Sector, 2014 ....................................................................................... 22

5 Switzerland, Power Market, Regulatory Scenario ..................................................................... 23

5.1 Switzerland, Power Market, Market Liberalization ............................................................. 23

5.2 Switzerland, Power Market, Renewable Energy Development .......................................... 23

5.3 Switzerland, Power Market, Nuclear Power Policy ............................................................ 26

6 Switzerland, Power Market, Capacity and Generation Overview ............................................... 27

6.1 Switzerland, Power Market, Cumulative Installed Capacity by Fuel Type, 2014 ................ 27

6.2 Switzerland, Power Market, Cumulative Installed Capacity and Annual Power Generation, 2000–2025 ........................................................................................................................ 28


Table of Contents


LANDSCAPE

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–2025 ............................................................................................................................. 31

6.2.2 Cumulative Installed Hydropower Capacity and Annual Hydropower Generation, 2000–2025 ............................................................................................................................. 35

6.2.3 Cumulative Installed Nuclear Power Capacity and Annual Nuclear Power Generation, 2000–2025 ................................................................................................................... 39

6.2.4 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation, 2000–2025 ................................................................................................................... 42

7 Switzerland, Power Market, Transmission and Distribution Overview ....................................... 46

7.1 Switzerland, Power Market, Transmission Network Overview ........................................... 46

7.2 Switzerland, Power Market, Distribution Network Overview .............................................. 47

7.3 Switzerland, Power Market, Grid Interconnection .............................................................. 48

7.3.1 Electricity Imports and Exports, 2000–2014 .................................................................. 49

7.4 Switzerland, Power Market, Electricity Trading.................................................................. 50

8 Switzerland, Power Market, Competitive Landscape: Snapshot of Leading Power Generating Companies ............................................................................................................................... 51

8.1 Key Companies in the Switzerland Power Market, Alpiq Holding AG ................................ 51

8.1.1 Alpiq Holding AG, Company Overview .......................................................................... 51

8.1.2 Alpiq Holding AG, Business Description ........................................................................ 51

8.1.3 Alpiq Holding AG, SWOT Analysis ................................................................................ 52

8.2 Key Companies in Switzerland Power Market, BKW AG ................................................... 56

8.2.1 BKW AG, Company Overview ....................................................................................... 56

8.2.2 BKW AG, Business Description ..................................................................................... 56

8.2.3 BKW AG, SWOT Analysis ............................................................................................. 58

8.3 Key Companies in Switzerland Power Market, Axpo Holding AG ...................................... 60

8.3.1 Axpo Holding AG, Company Overview .......................................................................... 60

8.3.2 Axpo Holding AG, Business Description ........................................................................ 61

8.3.3 Axpo Holding AG, SWOT Analysis ................................................................................ 62

9 Appendix................................................................................................................................... 66


Table of Contents


LANDSCAPE

9.1 Market Definitions ............................................................................................................. 66

9.1.1 Power ............................................................................................................................ 66

9.1.2 Installed Capacity .......................................................................................................... 66

9.1.3 Electricity Generation .................................................................................................... 66

9.1.4 Electricity Consumption ................................................................................................. 66

9.1.5 Thermal Power Plant ..................................................................................................... 66

9.1.6 Hydropower Plant .......................................................................................................... 66

9.1.7 Nuclear Power............................................................................................................... 66

9.1.8 Renewable Energy Resources ...................................................................................... 67

9.2 Abbreviations .................................................................................................................... 67

9.3 Bibliography ...................................................................................................................... 68

9.4 GlobalData’s Methodology ................................................................................................ 68

9.4.1 Coverage ...................................................................................................................... 69

9.4.2 Secondary Research and Analysis ................................................................................ 69

9.4.3 Primary Research and Analysis..................................................................................... 70

9.5 Disclaimer ......................................................................................................................... 70


Table of Contents


LANDSCAPE

1.1 List of Tables

Table 1: Power Market, Switzerland, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2020 ................................................................................................. 14

Table 2: Power Market, Switzerland, Market Share of Leading Power Generation Companies (%), 2014 ... 17

Table 3: Power Market, Switzerland, Deal Value ($bn) and Number of Deals, 2004–May 2015 ................. 18

Table 4: Power Market, Switzerland, Deals by Type (%), 2014 .................................................................. 19

Table 5: Power Market, Switzerland, Annual Power Consumption (TWh), 2000–2025 ............................... 21

Table 6: Power Market, Switzerland, Power Consumption by Sector (%), 2014 ......................................... 22

Table 7: Power Market, Switzerland, Feed-in Tariffs (CHF/kWh and $/kWh), 2014 .................................... 24

Table 8: Power Market, Switzerland, Cumulative Installed Capacity by Fuel Type (%), 2014 ..................... 27

Table 9: Power Market, Switzerland, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2025 ...................................................................................................................... 30

Table 10: Power Market, Switzerland, Leading Thermal Power Plants, 2015 ............................................... 32

Table 11: Power Market, Switzerland, Cumulative Installed Thermal Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 34

Table 12: Power Market, Switzerland, Leading Hydropower Plants, 2015 .................................................... 36

Table 13: Power Market, Switzerland, Cumulative Installed Hydropower Capacity (GW) and Annual

Hydropower Generation (TWh), 2000–2025................................................................................. 38

Table 14: Power Market, Switzerland, Leading Active Nuclear Power Reactors, 2015 ................................. 39

Table 15: Power Market, Switzerland, Cumulative Installed Nuclear Power Capacity (GW) and Annual

Nuclear Power Generation (TWh), 2000–2025 ............................................................................ 41

Table 16: Power Market, Switzerland, Leading Renewable Power Plants, 2015 .......................................... 43

Table 17: Power Market, Switzerland, Cumulative Installed Renewable Capacity (GW) and Annual

Renewable Power Generation (TWh), 2000–2025 ....................................................................... 45

Table 18: Power Market, Switzerland, Transmission Line Length (Ckm), 2000–2020 ................................... 47

Table 19: Power Market, Switzerland, Distribution Line Length (Ckm), 2000–2020 ...................................... 48


Table of Contents


LANDSCAPE

Table 20: Power Market, Switzerland, Annual Imports and Exports (TWh), 2000–2014 ............................... 50

Table 21: Power Market, Switzerland, Alpiq Holding AG, SWOT Analysis, 2015 .......................................... 53

Table 22: Power Market, Switzerland, BKW AG, SWOT Analysis, 2015 ...................................................... 58

Table 23: Power Market, Switzerland, Axpo Holding AG, SWOT Analysis, 2015.......................................... 62

Table 24: Abbreviations .............................................................................................................................. 67


Table of Contents


LANDSCAPE

1.2 List of Figures

Figure 1: Power Market, Switzerland, Gross Domestic Product ($bn), Population (million), and Annual Power

Consumption (TWh), 2000–2020 ................................................................................................. 13

Figure 2: Power Market, Switzerland, Market Share of Leading Power Generation Companies (%), 2014 ... 17

Figure 3: Power Market, Switzerland, Deal Value ($bn) and Number of Deals, 2004–May 2015 ................. 18

Figure 4: Power Market, Switzerland, Deals by Type (%), 2014 .................................................................. 19

Figure 5: Power Market, Switzerland, Annual Power Consumption (TWh), 2000–2025 ............................... 20

Figure 6: Power Market, Switzerland, Power Consumption by Sector (%), 2014 ......................................... 22

Figure 7: Power Market, Switzerland, Cumulative Installed Capacity by Fuel Type (%), 2014 ..................... 27

Figure 8: Power Market, Switzerland, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2025 ...................................................................................................................... 29

Figure 9: Power Market, Switzerland, Cumulative Installed Thermal Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 33

Figure 10: Power Market, Switzerland, Cumulative Installed Hydropower Capacity (GW) and Annual

Hydropower Generation (TWh), 2000–2025................................................................................. 37

Figure 11: Power Market, Switzerland, Cumulative Installed Nuclear Power Capacity (GW) and Annual

Nuclear Power Generation (TWh), 2000–2025 ............................................................................ 40

Figure 12: Power Market, Switzerland, Cumulative Installed Renewable Capacity (GW) and Annual

Renewable Power Generation (TWh), 2000–2025 ....................................................................... 44

Figure 13: Power Market, Switzerland, Annual Imports and Exports (TWh), 2000–2014 ............................... 49



Introduction

2 Introduction

Switzerland is a highly developed market-based economy with a very high per-capita Gross

Domestic Product (GDP). In 2013, the per-capita GDP, estimated using the purchasing power

parity methodology, amounted to $XX. The country’s manufacturing sector has progressed

immensely, with special emphasis placed on knowledge-based production. Other notable features

include political and economic stability, well-developed infrastructural facilities, a transparent legal

system, and an efficient capital market. Economic activities are carried out in accordance with EU

practices, which have introduced more competition.

The 2008–2009 global economic recession had an adverse effect as export demand declined

drastically. This meant substantial revenue losses, as Switzerland is largely dependent on

neighboring countries for export revenues. In order to address the situation, the Swiss National

Bank implemented a zero-interest-rate policy in order to boost the economy, as a result of which

GDP growth increased from a negative rate of XX% in 2009 to a positive XX% in 2010. The

sovereign debt crisis also poses a serious threat to Switzerland’s financial position, as the Swiss

franc is likely to appreciate in the current scenario. The Swiss Bank is therefore working to contain

the franc’s tendency to appreciate further by upholding its zero-interest-rate policy. The

government is putting pressure on the Bank to weaken the currency, as exports have become less

competitive. The GDP growth rate fell to XX% in 2012 as a result of this situation.

In 2014, Switzerland registered a GDP of $XX billion (IMF, 2015). Of this, the services sector

accounted for the largest share with an estimated XX%, followed by the industry sector with XX%

and the agricultural sector with the remaining XX% (CIA, 2015). Switzerland exports commodities

such as machinery, chemicals, metals, watches, and agricultural products, and its main trading

partners are Germany, Italy, France and the US.

The Federal Department of Environment, Transport, Energy and Communications (DETEC) is a

major department of Switzerland’s federal government, and the Swiss Federal Office of Energy

(SFOE) functions under it. The SFOE is responsible for ensuring a secure and efficient power

supply, promoting renewable energy, and reducing carbon dioxide emissions. The Swiss Federal

Electricity Commission (ElCom) is the regulatory authority of the electricity sector. Axpo is one of

the main power generation companies in Switzerland, with a XX% share of installed capacity.

Other major players include Alpiq Holding, with a XX% share, and BKW Energie, with an XX%

share. The government is taking steps to increase the number of renewable energy plants in the



Introduction

country, and its target is for XX% of its annual power consumption to come from renewable

sources by 2030.

2.1 GlobalData Report Guidance

The executive summary captures the key growth trends in Switzerland’s power market.

Chapter three provides a snapshot of the key parameters that affect Switzerland’s power

sector, as well as key points about the power market.

Chapter four provides analysis of Switzerland’s power market.

Chapter five provides details of the regulatory scenario for the power market and the inward

foreign investment scenario.

Chapter six provides information regarding Switzerland’s cumulative installed capacity and

annual generation trends, both as a whole and by individual generation source.

Chapter seven describes the power Transmission and Distribution (T&D) infrastructure in

Switzerland and includes information on interconnectors with neighboring countries. It also

covers electricity imports and exports, and upcoming grid-related projects.

Note: all 2014 market figures provided in the report are estimates, except where actual data were

available.



Market Analysis

4.4 Switzerland, Power Market, Demand Structure

Power consumption is increasing due to economic and population growth. GDP increased by XX%

in 2014, while the population is estimated to have grown by XX% per year (IMF, 2015). In 2011,

electricity consumption recorded a negative growth rate due to warmer weather conditions, which

reduced the use of electrical heating appliances. Growth in 2012, 2013, and 2014 remained

sluggish due to the overall economic scenario that saw a lower industrial output. Power

consumption increased from XX TWh in 2000 to XX TWh in 2014 at a CAGR of XX%, and from

2015 to 2025 is expected to increase from XX TWh in 2015 to XX TWh in 2025 at a CAGR of XX%.

Figure 5: Power Market, Switzerland, Annual Power Consumption (TWh), 2000–2025

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Ann

ual p

ower

con

sum

ptio

n (T

Wh)

Source: GlobalData, Power Database [Accessed on May 29, 2015]



Market Analysis

Table 5: Power Market, Switzerland, Annual Power Consumption (TWh), 2000–2025

Year Annual power consumption

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source: GlobalData, Power Database [Accessed on May 29, 2015]



Market Analysis

4.4.1 Consumption by Sector, 2014

The industrial and residential sectors are the most important sectors in terms of power

consumption, accounting for XX% and XX% in 2014, while the services sector accounted for XX%,

the transport sector for XX%, and the agricultural sector for the remaining XX%.

Figure 6: Power Market, Switzerland, Power Consumption by Sector (%), 2014

Industrial

Residential

Trade, commerce, and other services

Transport

Agriculture and fisheries

Source: GlobalData

Table 6: Power Market, Switzerland, Power Consumption by Sector (%), 2014 Sector Share

Industrial

Residential

Trade, commerce, and other services

Transport

Agriculture and fisheries

Source: GlobalData


Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

Power refers to the rate of production, transfer or energy use, usually related to electricity. It is

measured in Watts (W) and often expressed in kilowatts (kW) or Megawatts (MW). It is also known

as real power or active power.

9.1.2 Installed Capacity

Installed capacity refers to the generator’s nameplate capacity as stated by the manufacturer, or

the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on

a nameplate affixed to the generator.

9.1.3 Electricity Generation

Electricity generation refers to the process of generating electricity from other forms of energy. It

also refers to the amount of electricity produced, expressed in Gigawatt hours (GWh).

9.1.4 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports and

transmission and distribution losses. It is measured in Gigawatt hours (GWh).

9.1.5 Thermal Power Plant

A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels.

9.1.6 Hydropower Plant

A hydropower plant is a plant in which the turbine generators are driven by falling water.

9.1.7 Nuclear Power

Nuclear power is the energy released from the fission of nuclear fuel in a reactor.


Appendix


9.1.8 Renewable Energy Resources

Renewable energy resources are those that provide energy that is naturally replenished but limited

in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydro and

wind are examples of renewable resources.

9.2 Abbreviations

Table 24: Abbreviations Abbreviation Full form

CAGR Compound Annual Growth Rate

CCGT Combined-Cycle Gas Turbine

CESOC Central European System Operation Coordinator

CHP Combined Heat and Power

Ckm Circuit kilometer

DETEC Department of Environment, Transport, Energy and Communications

DSO Distribution System Operator

ElCom Swiss Federal Electricity Commission

ENTSO-E European Network of Transmission System Operators for Electricity

ESL Electricity Supply Law

FiT Feed-in Tariff

GDP Gross Domestic Product

GW Gigawatt

GWh Gigawatt hour

kV kilovolt

kW kilowatt

MW Megawatt

MWh Megawatt hour

PV Photovoltaic

SFOE Swiss Federal Office of Energy

T&D Transmission and Distribution

TWh Terawatt hours

Source: GlobalData


Appendix


9.3 Bibliography

CIA (2015). The World Factbook. Central Intelligence Agency. Available from

https://www.cia.gov/library/publications/the-world-factbook/geos/sz.html [Accessed on June 1,

2015]

DemoScope (2014). via WNN. “Swiss want say on nuclear phase out”. World Nuclear News,

January 23, 2014. Available from: http://www.world-nuclear-news.org/NP-Swiss-want-say-on-

nuclear-phase-out-2301144.html [Accessed on: May 29, 2015]

IMF (2015). International Monetary Fund, World Economic Outlook Database, April 2015

[database]. International Monetary Fund. Available from:

http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/weoselco.aspx?g=2001&sg=All+coun

tries [Accessed on June 1, 2015]

RES-LEGAL (2014). Switzerland: Feed-in tariff. Renewable Energy Policy Database and

Support. Available from: http://www.res-legal.eu/search-by-country/switzerland/single/s/res-

e/t/promotion/aid/feed-in-tariff-1/lastp/396/ [Accessed on: May 29, 2015]

WNA (2015). Nuclear Power in Switzerland. World Nuclear Association. Available from

http://www.world-nuclear.org/info/Country-Profiles/Countries-O-S/Switzerland/ [Accessed on

June 1, 2015]

9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All of GlobalData’s databases are continuously updated and revised. The following methodology

has been followed for the collection and analysis of data presented in this report.


Appendix


9.4.1 Coverage

This report covers the Swiss power market, examining the market structure and providing historical

generation, capacity and consumption forecasts until 2025. It also looks at the market’s regulatory

structure, import and export trends, competitive landscape and leading active and upcoming power

projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources including but not limited to:

Government agencies, ministry websites, industry associations, the World Bank, IMF, and

statistical databases

Company websites, annual reports, financial reports, analyst reports and investor

presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases such as the Capacity and Generation Database, Power

Plant Database and Transmission and Distribution Database

Further to this, the following secondary information is collected and analyzed to project

Switzerland’s power market scenario to 2025, analyzing factors such as:

Macroeconomic scenario

Government regulations, policies and targets

Government and private sector investment

Contract and deal announcements

Utility expansion plans

The sector’s historical track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations


Appendix


9.4.3 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify the market numbers obtained through secondary research and obtain first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including power producers,

equipment manufacturers, industry associations, government bodies, utilities, distributors, and

academia. The participants include but are not limited to C-level executives, industry consultants,

academic experts, business development and sales managers, purchasing managers, plant

managers, government officials and industry spokespersons.

9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

This report is a licensed product and should not to be reproduced without prior permission.

Documents

GDPE0791ICR- Switzerland Power Market Outlook …Switzerland Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 11 SWITZERLAND POWER